The UK Treasury today announced a subsidy of more than £400 million (USD 496 million) to start the ball rolling on the so-called “full-fibre” broadband network build. That new money forms part of the government’s Autumn Statement – a sort of mini-budget – and seems partly designed to spur confidence in the UK government’s plans to stimulate growth in the economy through infrastructure spending to steady business nerves over the long run-up to Brexit.

The idea behind the boost is that network builders need an inducement to make the fibre build investment in the less lucrative areas. They will bid for funds (few details yet) and match what they get from the government with private finance.

Hope to spur £1 billion in investment

It’s hoped that the exercise will spur over £1 billion (USD 1.24 billion) in investment in ‘full fibre’ deployment – at present it’s estimated that only 2 per cent of all UK addresses are connected to fibre and that’s one of the lowest rates in Europe.

Whether this amount being spent on fibre build is going to move the dial in a major way is an open question. The Chancellor estimates that it will spur another 2 million homes into fibre connection. Obviously every little bit helps.

Certainly at least some of the UK’s alternative network builders are pleased.

Closing the ‘fibre gap’?

CityFibre, which is already present in 40 towns and cities across the UK, including 25 of the top 30 cities outside London is predictably positive, reiterating its view that infrastructure competition (rather than opening up existing networks to other players) “is the only way for the UK to close its yawning fibre gap with other developed nations.”